Law of Business Organisation Assignment - Jupiter Publication Ltd
Added on 2020-10-23
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Law of BusinessOrganisations
INTRODUCTION...........................................................................................................................1QUESTIONS...................................................................................................................................1Part (a) Breaching of any fiduciary and administrative duties as directors of Jupiterpublication Ltd............................................................................................................................1Part (b) Suggestion given to Mark (minority shareholder) possible action against directors.....5CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8
INTRODUCTIONLaw is a cluster of distinct norms, acts, legitimate orders, amendments, rules andregulations which is framed by legal bodies in order to facilitate society as well as corporateworld with best services (Allen and Kraakman, 2016). Basically, their main objective is toprevent community from getting misused and trying to recognize significant people about theirindispensable rights or duties. However, number of sections are falls under companies act of UKlaw which helps an enterprise while handling distinct complicated situations by imposingsuitable act. Thus, assignment is going to highlight the case study of Jupiter Publication Ltd. Inwhich company is gone through a major financial crisis because of various reasons. Moreover,main motive of this project is to outline the fiduciary and administrative duty of board ofdirectors towards company success and development. Furthermore, throw some lights on givingsuggestion to shareholder for taking action against directors for showing their roles towardscompany. QUESTIONS Part (a) Breaching of any fiduciary and administrative duties as directors of Jupiter publicationLtdIn given case study Jupiter publication Ltd. Is an organization which was established inaround 1998 in order to facilitate consumers with publication facilities. Their main objective is toengaged in publishing novels, reports, stories and so on. Thus, four of directors are handling thisorganization in proper manner and holding almost 15% of company shares. It means, shares ofenterprise is equally distributed between four directors named as May, Belinda, Harry and Tim.On the other hand rest of the shares are belongs to some other investors which are not havingmuch more connected with company (Matsushitaand et. al., 2015). Furthermore, Peter Higginsis one of the successful writer and offering best opportunity to all the four directors but they arerejecting the proposal. But at the same time May is believing in decision of Peter and engagingwith him silently without sharing it with any of her partners. As a result, Peter get succeeded ingenerating maximum revenue with his outstanding stories and attract high range of clients inminimum time frame. Twist came in the story when Harry is going through a major financial problem due towhich company get ready for paying loan to Harry for overcoming this issue. After that, few1
days ago printing press of Jupiter Publication Ltd. Get burgled due to which they are facingmajor problem because Tim who is in charge of insuring the assets of an organization.Unfortunately, he wasn’t checked the overall paper of insurance company while signing contractwith them in which it is clearly mentioned that insurance organization is not liable for burglaryand did not pay in this case. Thus, claim is useless because Tim was not done his work in propermanner due to which they get involved in a serious financial problem. As a result company isencountering a major trauma all because board of directors get failed in fulfilling their job role inproper manner. Throughout the study it has been understood that all the four directors are liable for thisloss because they are not fulfilling their job in proper manner neither performing any of businessactivities due to which company is going through this issue. According to law, board of directorsare liable for all the major decision because they are having some major responsibilities andliable for administrative in order to run all the organization in proper manner. Fiduciary duties ofdirectors highlights the major relationship of trust or loyalty between company and its membersas well as other stakeholder (LAWand COOPER, 2015). Top most expectation is that personwho is liable for directing an organization must perform all the activities in a faithful waywithout doing any discrimination amongst staff members. Along with this, they need to keeninterested in management of an association as all the responsibilities are depend upon them only.Mainly, all the duties are interconnected with each other with common one as well as statutorywhich is laid down in companies act 2006. Apart from this, new concept emerges for clarifyingthe wide ranging duties of director that is named as “Enlightened Shareholder value”. Mainmotive of this term is to show the consideration of employees and other shareholders opinionswhile decision making process of directors as well as all the other staff members. Hence, some ofthe major duties of directors are discussed as follows:- Duty to act within powers:- According to this element, some of the main or foremostpowers are described in organization “articles of association” and these authorities are only usefor some special purposes. For instance; betterment of an enterprise instead of director benefits(Aghion, Bloomand Van Reenen, 2013). Liability to promote success of an enterprise:- It means, directors needs to considersome of the major factors while making final judgment such as; initially forecast potential longterm outcomes of an association; secondly, interest of entire staff members; need to maintain2
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